Press Release
NCR Announces Third Quarter 2016 Results
NCR Announces Third Quarter 2016 Results
October 25, 2016 at 4:16 PM EDT
- Q3 revenue and earnings better than expected led by accelerating revenue growth and an improved operating margin; Revenue up 4% as reported and up 10% excluding FX and the IPS divestiture
-
Software revenue up 8%, driven by software license growth of 25%
and cloud growth of 7%; Net annual contract value for cloud of
$15 million in Q3, a leading indicator of future cloud revenue, up from$5 million in the prior year -
GAAP diluted EPS of
$0.69 in Q3 up from prior year Q3 of$0.59 , an increase of 17%; Non-GAAP diluted EPS of$0.87 up from prior year Q3 of$0.78 , an increase of 14% constant currency -
Cash flow from operations of
$225 million , up 32%; Free cash flow of$153 million , up 44% - 2016 full year revenue and non-GAAP earnings guidance raised and cash flow guidance reaffirmed
“Today we are increasing our full year 2016 revenue and non-GAAP
earnings guidance due to accelerating revenue trends, ongoing
improvement in execution, and the benefits of our global Omni-Channel
leadership position,” said Chairman and CEO
In this release, we use certain performance metrics as well as certain
non-GAAP measures, including presenting certain measures on a constant
currency and adjusted constant currency basis. The performance metrics
include net annual contract value, and the non-GAAP measures include
free cash flow and others with the words “non-GAAP” or “adjusted” in
their titles. The performance metrics are listed and described, and the
non-GAAP measures are listed, described and reconciled to their most
directly comparable GAAP measures, under the heading “Performance
Metrics and Non-GAAP Financial Measures” later in this release.
Additionally, effective
Third Quarter 2016 Operating Results
Revenue
Third quarter revenue of $1.68 billion was up 4% year-over-year. On an adjusted constant currency basis, third quarter revenue was up 10%. Foreign currency fluctuations and the IPS divestiture had an unfavorable impact on the revenue comparison of zero and 6%, respectively. The following table shows the revenue by segment for the third quarter:
| Third Quarter | ||||||||||||||||||
| $ in millions | 2016 | 2015 | % Change |
% Change |
||||||||||||||
| Software License | $ | 90 | $ | 72 | 25 | % | 26 | % | ||||||||||
| Software Maintenance | 92 | 86 | 7 | % | 7 | % | ||||||||||||
| Cloud | 142 | 133 | 7 | % | 6 | % | ||||||||||||
| Professional Services | 144 | 143 | 1 | % | — | % | ||||||||||||
| Software Revenue | $ | 468 | $ | 434 | 8 | % | 7 | % | ||||||||||
| Services Revenue | $ | 591 | $ | 563 | 5 | % | 6 | % | ||||||||||
| ATM | $ | 324 | $ | 291 | 11 | % | 11 | % | ||||||||||
| SCO | 104 | 56 | 86 | % | 86 | % | ||||||||||||
| POS | 185 | 183 | 1 | % | 2 | % | ||||||||||||
| IPS | 5 | 86 | (94 | %) | (14 | %) | ||||||||||||
| Hardware Revenue | $ | 618 | $ | 616 | — | % | 16 | % | ||||||||||
| Total Revenue | $ | 1,677 | $ | 1,613 | 4 | % | 10 | % | ||||||||||
Gross Margin
Third quarter gross margin of
Expenses
Third quarter operating expenses of
Operating Income
Third quarter operating income of
Other (Expense)
Third quarter other (expense) and other (expense) (non-GAAP) were each
Income Tax Expense
Third quarter income tax expense of
Net Income from Continuing Operations Attributable to NCR
Third quarter net income from continuing operations attributable to NCR
of
Cash Flow
Third quarter cash provided by operating activities of
2016 Outlook
We are increasing our 2016 revenue and non-GAAP earnings guidance. We
now expect revenue to be
We now expect GAAP diluted earnings per share to be
We are reaffirming our free cash flow guidance. We continue to expect
net cash provided by operating activities to be
Fourth Quarter 2016 Outlook
For the fourth quarter of 2016, revenue is expected to be
NCR will provide additional information regarding its 2016 guidance during its third quarter earnings conference call and webcast.
2016 Third Quarter Earnings Conference Call
A conference call is scheduled for today at
More information on NCR’s Q3 2016 earnings, including additional financial information and analysis, is available on NCR’s Investor Relations website at http://investor.ncr.com/.
About
NCR is headquartered in
Web site: www.ncr.com
Twitter:
@NCRCorporation
Note to Investors This release contains forward-looking
statements. Forward-looking statements use words such as “expect,”
“anticipate,” “outlook,” “intend,” “believe,” “will,” “should,” “would,”
“could” and words of similar meaning. Statements that describe or relate
to NCR’s plans, goals, intentions, strategies or financial outlook, and
statements that do not relate to historical or current fact, are
examples of forward-looking statements. The forward-looking statements
in this release include statements about the reasons for increasing
NCR’s full year 2016 revenue and earnings guidance, including with
respect to accelerating revenue trends, ongoing improvement in execution
and NCR’s Omni-Channel Software, Channel Transformation and Digital
Enablement leadership; cost and efficiency improvements in NCR’s
Services business and their expected benefits, including with respect to
margin performance; trends in store automation and the self-checkout
market and their effects on NCR’s Hardware business; NCR’s business
momentum in the fourth quarter of 2016; NCR’s omni-channel strategy and
its expected benefits; market and economic conditions affecting NCR and
its business and NCR's full-year and fourth quarter financial outlook
(including the section entitled "2016 Outlook") and the expected type
and magnitude of the non-operational adjustments included in any
forward-looking non-GAAP measures. Forward-looking statements are based
on our current beliefs, expectations and assumptions, which may not
prove to be accurate, and involve a number of known and unknown risks
and uncertainties, many of which are out of NCR's control.
Forward-looking statements are not guarantees of future performance, and
there are a number of important factors that could cause actual outcomes
and results to differ materially from the results contemplated by such
forward-looking statements, including those factors relating to:
domestic and global economic and credit conditions including, in
particular, market conditions and spending trends in the financial
services industry, fluctuations in oil and commodity prices and their
effects on local, regional and global market conditions, economic and
market conditions in
Performance Metrics and Non-GAAP Financial Measures
Performance Metrics. The term “net annual contract value” or “net ACV” for any particular period means NCR’s net bookings for cloud revenue during the period, and is calculated as twelve months of expected subscription revenues under new cloud contracts during such period less twelve months of subscription revenues under cloud contracts that expired or were terminated during such period.
Non-GAAP Financial Measures. While NCR reports its results in
accordance with Generally Accepted Accounting Principles in
Diluted EPS (non-GAAP), Gross Margin (non-GAAP), Operating Expenses (non-GAAP), Operating Income (non-GAAP), Other (Expense) (non-GAAP), Income Tax Expense (non-GAAP), and Net Income Attributable to Continuing Operations (non-GAAP). NCR’s diluted earnings per share (non-GAAP), gross margin (non-GAAP), operating expenses (non-GAAP), operating income (non-GAAP), other (expense) (non-GAAP), income tax expense (non-GAAP), and net income attributable to continuing operations (non-GAAP) are determined by excluding pension mark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits and other special items, including amortization of acquisition related intangibles, from NCR’s GAAP earnings per share, gross margin, expenses, income (loss) from operations, other (expense), income tax expense and net income attributable to continuing operations, respectively.
Due to the non-operational nature of these pension and other special items, NCR's management uses these non-GAAP measures to evaluate year-over-year operating performance. NCR also uses operating income (non-GAAP) and diluted EPS (non-GAAP), to manage and determine the effectiveness of its business managers and as a basis for incentive compensation. NCR believes these measures are useful for investors because they provide a more complete understanding of NCR's underlying operational performance, as well as consistency and comparability with NCR's past reports of financial results.
Free Cash Flow. NCR defines free cash flow as net cash provided by/used in operating activities and cash flow provided by/used in discontinued operations less capital expenditures for property, plant and equipment, additions to capitalized software, discretionary pension contributions and pension settlements. NCR's management uses free cash flow to assess the financial performance of the Company and believes it is useful for investors because it relates the operating cash flow of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures which can be used for, among other things, investment in the Company's existing businesses, strategic acquisitions, strengthening the Company's balance sheet, repurchase of Company stock and repayment of the Company's debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures since there may be other nondiscretionary expenditures that are not deducted from the measure. Free cash flow does not have a uniform definition under GAAP and, therefore, NCR's definition may differ from other companies' definitions of this measure.
Constant Currency, IPS Divestiture and Adjusted Constant Currency.
NCR presents certain financial measures, such as period-over-period
revenue growth, on a constant currency basis, which excludes the effects
of foreign currency translation by translating prior period results at
current period monthly average exchange rates. Due to the overall
variability of foreign exchange rates from period to period, NCR’s
management uses constant currency measures to evaluate
period-over-period operating performance on a more consistent and
comparable basis. NCR also presents certain financial measures on an
adjusted constant currency basis, which excludes both the effects of
foreign currency translation, as described above, and the results of
NCR’s Interactive Printer Solutions (IPS) business for the comparable
prior period after completion of the sale of the business (which results
were previously included in NCR’s Hardware segment). NCR completed the
sale of all but the
NCR's definitions and calculations of these non-GAAP measures may differ from similarly-titled measures reported by other companies and cannot, therefore, be compared with similarly-titled measures of other companies. These non-GAAP measures should not be considered as substitutes for, or superior to, results determined in accordance with GAAP. These non-GAAP measures are reconciled to their most directly comparable GAAP measures in the tables below or, in the case of quarterly free cash flow, in the body of this release.
|
Reconciliation of Gross Margin (GAAP) to Gross Margin (non-GAAP) |
||||||||
| $ in millions | Q3 2016 Actual | Q3 2015 Actual | ||||||
| Gross Margin (GAAP) | $ | 477 | $ | 457 | ||||
| Acquisition-related amortization of intangibles | 14 | 15 | ||||||
| Pension mark-to-market adjustments | — | 1 | ||||||
| Operating Gross Margin (Non-GAAP) | $ | 491 | $ | 473 | ||||
|
Reconciliation of Operating Expenses (GAAP) to Operating Expenses (non-GAAP) |
||||||||||
| $ in millions | Q3 2016 Actual | Q3 2015 Actual | ||||||||
| Operating Expenses (GAAP) | $ | 288 | $ | 289 | ||||||
| Restructuring/Transformation Costs | (8 | ) | (12 | ) | ||||||
| Acquisition-related amortization of intangibles | (17 | ) | (16 | ) | ||||||
| Acquisition-related costs | (2 | ) | (2 | ) | ||||||
| Operating Expenses (Non-GAAP) | $ | 261 | $ | 259 | ||||||
|
Reconciliation of Income from Operations (GAAP) to Operating Income (non-GAAP) |
||||||||
| $ in millions | Q3 2016 Actual | Q3 2015 Actual | ||||||
| Income from Operations (GAAP) | $ | 189 | $ | 168 | ||||
| Restructuring/Transformation Costs | 8 | 12 | ||||||
| Acquisition-related costs | 2 | 2 | ||||||
| Acquisition-related amortization of intangibles | 31 | 31 | ||||||
| Pension mark-to-market adjustments | — | 1 | ||||||
| Operating Income (Non-GAAP) | $ | 230 | $ | 214 | ||||
|
Reconciliation of Income Tax Expense (GAAP) to Income Tax Expense (non-GAAP) |
||||||||
| $ in millions | Q3 2016 Actual | Q3 2015 Actual | ||||||
| Income Tax Expense (GAAP) | $ | 31 | $ | 16 | ||||
| Restructuring/Transformation Costs | 1 | 4 | ||||||
| Acquisition-related costs | 1 | — | ||||||
| Acquisition-related amortization of intangibles | 11 | 10 | ||||||
| Income Tax Expense (Non-GAAP) | $ | 44 | $ | 30 | ||||
|
Reconciliation of Net Income from Continuing Operations Attributable to NCR (GAAP) to Net Income from Continuing Operations Attributable to NCR (non-GAAP) |
||||||||
| $ in millions | Q3 2016 Actual | Q3 2015 Actual | ||||||
| Net Income from Continuing Operations Attributable to NCR (GAAP) | $ | 107 | $ | 102 | ||||
| Restructuring/Transformation Costs | 7 | 8 | ||||||
| Acquisition-related costs | 1 | 2 | ||||||
| Acquisition-related amortization of intangibles | 20 | 21 | ||||||
| Pension mark-to-market adjustments | — | 1 | ||||||
| Net Income from Continuing Operations Attributable to NCR (Non-GAAP) | $ | 135 | $ | 134 | ||||
|
Reconciliation of Diluted Earnings Per Share (GAAP) to Non-GAAP Diluted Earnings Per Share (non-GAAP) |
||||||||||||||
|
Q3 2016 |
Q3 2015 |
2016 |
Q4 2016 |
|||||||||||
| Diluted Earnings Per Share (GAAP) (1) | $ | 0.69 | $ | 0.59 | $2.25 - $2.30 | $0.87 - $0.92 | ||||||||
| Restructuring/Transformation Costs | 0.05 | 0.05 | 0.14 | 0.01 | ||||||||||
| Acquisition-related amortization of intangibles | 0.12 | 0.12 | 0.53 | 0.13 | ||||||||||
| Acquisition-related costs | 0.01 | 0.01 | 0.02 | — | ||||||||||
| Divestiture and liquidation losses | — | — | 0.03 | — | ||||||||||
| Pension mark-to-market adjustments | — | 0.01 | — | — | ||||||||||
| Non-GAAP Diluted Earnings Per Share (non-GAAP) (1) | $ | 0.87 | $ | 0.78 | $2.97 - $3.02 | $1.01 - $1.06 | ||||||||
| (1) | GAAP and non-GAAP diluted EPS are determined using the most dilutive measure, either including the impact of dividends on the Company's Series A Convertible Preferred Stock in the calculation of net income or loss available to common stockholders or including the impact of the conversion of the Series A Convertible Preferred Stock into common stock in the calculation of the weighted average diluted shares outstanding. Therefore, GAAP diluted EPS and non-GAAP diluted EPS may be calculated using different methods, and may not mathematically reconcile. |
| (2) | Except for the adjustments noted herein, this guidance does not include the effects of any future acquisitions/divestitures, restructuring activities, pension mark-to-market adjustments, taxes or other events, which are difficult to predict and which may or may not be significant. The diluted earnings per share (GAAP) guidance has been updated to include the expected impact of divestitures and liquidation losses. |
|
Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP) |
|||||||||||||
| $ in millions |
Q3 2016 |
Q3 2015 |
2016 |
||||||||||
| Net cash provided by operating activities | $ | 225 | $ | 170 | $675 - $725 | ||||||||
| Total capital expenditures | (62 | ) | (54 | ) | (220) | ||||||||
| Net cash used in discontinued operations | (10 | ) | (10 | ) | (30) | ||||||||
| Free cash flow | $ | 153 | $ | 106 | $425 - $475 | ||||||||
|
Reconciliation of Revenue Growth % (GAAP) to Revenue Growth Adjusted Constant Currency % (non-GAAP) |
||||||||||||
| Three months ended September 30, 2016 | ||||||||||||
|
Revenue Growth |
Favorable |
Divestiture |
Revenue Growth |
|||||||||
| Software License | 25% | (1)% | —% | 26% | ||||||||
| Software Maintenance | 7% | —% | —% | 7% | ||||||||
| Cloud | 7% | 1% | —% | 6% | ||||||||
| Professional Services | 1% | 1% | —% | —% | ||||||||
| Software | 8% | 1% | —% | 7% | ||||||||
| Services | 5% | (1)% | —% | 6% | ||||||||
| ATMs | 11% | —% | —% | 11% | ||||||||
| SCO | 86% | —% | —% | 86% | ||||||||
| POS | 1% | (1)% | —% | 2% | ||||||||
| IPS | (94)% | —% | (80)% | (14)% | ||||||||
| Hardware | —% | (1)% | (15)% | 16% | ||||||||
| Total Revenue | 4% | —% | (6)% | 10% | ||||||||
| Nine months ended September 30, 2016 | ||||||||||||
|
Revenue Growth |
Favorable |
Divestiture |
Revenue Growth |
|||||||||
| Software | 4% | —% | —% | 4% | ||||||||
| Services | 5% | (2)% | —% | 7% | ||||||||
| Hardware | (5)% | (1)% | (7)% | 3% | ||||||||
| Total Revenue | 1% | (1)% | (3)% | 5% | ||||||||
|
Schedule A |
||||||||||||||||||||
|
NCR CORPORATION |
||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (in millions, except per share amounts) | ||||||||||||||||||||
| For the Periods Ended September 30 | ||||||||||||||||||||
| Three Months | Nine Months | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenue | ||||||||||||||||||||
| Products | $ | 708 | $ | 688 | $ | 1,932 | $ | 1,995 | ||||||||||||
| Services | 969 | 925 | 2,809 | 2,698 | ||||||||||||||||
| Total Revenue | 1,677 | 1,613 | 4,741 | 4,693 | ||||||||||||||||
| Cost of products | 528 | 512 | 1,487 | 1,539 | ||||||||||||||||
| Cost of services | 672 | 644 | 1,951 | 2,161 | ||||||||||||||||
| Total gross margin | 477 | 457 | 1,303 | 993 | ||||||||||||||||
| % of Revenue | 28.4 | % | 28.3 | % | 27.5 | % | 21.2 | % | ||||||||||||
| Selling, general and administrative expenses | 225 | 224 | 678 | 788 | ||||||||||||||||
| Research and development expenses | 56 | 53 | 159 | 175 | ||||||||||||||||
| Restructuring-related charges | 7 | 12 | 13 | 33 | ||||||||||||||||
| Income (loss) from operations | 189 | 168 | 453 | (3 | ) | |||||||||||||||
| % of Revenue | 11.3 | % | 10.4 | % | 9.6 | % | (0.1 | )% | ||||||||||||
| Interest expense | (41 | ) | (42 | ) | (130 | ) | (131 | ) | ||||||||||||
| Other (expense), net | (8 | ) | (7 | ) | (33 | ) | (14 | ) | ||||||||||||
| Total other (expense), net | (49 | ) | (49 | ) | (163 | ) | (145 | ) | ||||||||||||
| Income (loss) before income taxes and discontinued operations | 140 | 119 | 290 | (148 | ) | |||||||||||||||
| % of Revenue | 8.3 | % | 7.4 | % | 6.1 | % | (3.2 | )% | ||||||||||||
| Income tax expense | 31 | 16 | 75 | 50 | ||||||||||||||||
| Income (loss) from continuing operations | 109 | 103 | 215 | (198 | ) | |||||||||||||||
| Loss from discontinued operations, net of tax | (2 | ) | (4 | ) | (2 | ) | (4 | ) | ||||||||||||
| Net income (loss) | 107 | 99 | 213 | (202 | ) | |||||||||||||||
| Net income attributable to noncontrolling interests | 2 | 1 | — | 4 | ||||||||||||||||
| Net income (loss) attributable to NCR | $ | 105 | $ | 98 | $ | 213 | $ | (206 | ) | |||||||||||
| Amounts attributable to NCR common stockholders: | ||||||||||||||||||||
| Income (loss) from continuing operations | $ | 107 | $ | 102 | $ | 215 | $ | (202 | ) | |||||||||||
| Dividends on convertible preferred stock | (13 | ) | — | (37 | ) | — | ||||||||||||||
| Income (loss) from continuing operations attributable to NCR common stockholders | 94 | 102 | 178 | (202 | ) | |||||||||||||||
| Loss from discontinued operations, net of tax | (2 | ) | (4 | ) | (2 | ) | (4 | ) | ||||||||||||
| Net income (loss) attributable to NCR common stockholders | $ | 92 | $ | 98 | $ | 176 | $ | (206 | ) | |||||||||||
| Net income (loss) per share attributable to NCR common stockholders: | ||||||||||||||||||||
| Net income (loss) per common share from continuing operations | ||||||||||||||||||||
| Basic | $ | 0.76 | $ | 0.60 | $ | 1.41 | $ | (1.19 | ) | |||||||||||
| Diluted | $ | 0.69 | $ | 0.59 | $ | 1.37 | $ | (1.19 | ) | |||||||||||
| Net income (loss) per common share | ||||||||||||||||||||
| Basic | $ | 0.74 | $ | 0.58 | $ | 1.40 | $ | (1.22 | ) | |||||||||||
| Diluted | $ | 0.68 | $ | 0.57 | $ | 1.36 | $ | (1.22 | ) | |||||||||||
| Weighted average common shares outstanding | ||||||||||||||||||||
| Basic | 123.9 | 169.8 | 126.0 | 169.5 | ||||||||||||||||
| Diluted | 155.4 | 172.3 | 156.8 | 169.5 | ||||||||||||||||
| (1) | Diluted EPS is determined using the most dilutive measure, either including the impact of the dividends on NCR's Series A Convertible Preferred Shares in the calculation of net income or loss available to common stockholders or including the impact of the conversion of such preferred stock into common stock in the calculation of the weighted average diluted shares outstanding. |
| Schedule B | ||||||||||||||||||||||||||||||||
| NCR CORPORATION | ||||||||||||||||||||||||||||||||
| REVENUE AND OPERATING INCOME SUMMARY | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| For the Periods Ended September 30 | ||||||||||||||||||||||||||||||||
| Three Months | Nine Months | |||||||||||||||||||||||||||||||
| 2016 | 2015 |
% |
% Change |
2016 | 2015 |
% |
% Change |
|||||||||||||||||||||||||
| Revenue by segment | ||||||||||||||||||||||||||||||||
| Software | $ | 468 | $ | 434 | 8% | 7% | $ | 1,339 | $ | 1,288 | 4% | 4% | ||||||||||||||||||||
| Software Gross Margin Rate | 51.1 | % | 51.8 | % | 51.0 | % | 51.4 | % | ||||||||||||||||||||||||
| Services | 591 | 563 | 5% | 6% | 1,708 | 1,628 | 5% | 7% | ||||||||||||||||||||||||
| Services Gross Margin Rate | 21.8 | % | 21.7 | % | 21.3 | % | 21.4 | % | ||||||||||||||||||||||||
| Hardware | 618 | 616 | —% | 16% | 1,694 | 1,777 | (5)% | 3% | ||||||||||||||||||||||||
| Hardware Gross Margin Rate | 19.9 | % | 20.5 | % | 18.0 | % | 18.8 | % | ||||||||||||||||||||||||
| Total Revenue | $ | 1,677 | $ | 1,613 | 4% | 10% | $ | 4,741 | $ | 4,693 | 1% | 5% | ||||||||||||||||||||
| Gross Margin Rate | 29.3 | % | 29.3 | % | 28.5 | % | 28.7 | % | ||||||||||||||||||||||||
| Operating income by segment | ||||||||||||||||||||||||||||||||
| Software | $ | 146 | $ | 135 | $ | 405 | $ | 382 | ||||||||||||||||||||||||
| % of Revenue | 31.2 | % | 31.1 | % | 30.2 | % | 29.7 | % | ||||||||||||||||||||||||
| Services | 56 | 49 | 139 | 133 | ||||||||||||||||||||||||||||
| % of Revenue | 9.5 | % | 8.7 | % | 8.1 | % | 8.2 | % | ||||||||||||||||||||||||
| Hardware | 28 | 30 | 32 | 45 | ||||||||||||||||||||||||||||
| % of Revenue | 4.5 | % | 4.9 | % | 1.9 | % | 2.5 | % | ||||||||||||||||||||||||
| Subtotal-segment operating income | $ | 230 | $ | 214 | $ | 576 | $ | 560 | ||||||||||||||||||||||||
| % of Revenue | 13.7 | % | 13.3 | % | 12.1 | % | 11.9 | % | ||||||||||||||||||||||||
| Other adjustments (1) | 41 | 46 | 123 | 563 | ||||||||||||||||||||||||||||
| Total income (loss) from operations | $ | 189 | $ | 168 | $ | 453 | $ | (3 | ) | |||||||||||||||||||||||
|
(1) The following table presents the other adjustments for NCR: |
||||||||||||||||
| For the Periods Ended September 30 | ||||||||||||||||
| Three Months | Nine Months | |||||||||||||||
| In millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Restructuring / transformation costs | $ | 8 | $ | 12 | $ | 23 | $ | 36 | ||||||||
| Acquisition-related amortization of intangible assets | 31 | 31 | 95 | 94 | ||||||||||||
| Acquisition-related costs | 2 | 2 | 5 | 7 | ||||||||||||
| OFAC and FCPA investigations | — | — | — | 1 | ||||||||||||
| Pension mark-to-market adjustments | — | 1 | — | 425 | ||||||||||||
| Total other adjustments | $ | 41 | $ | 46 | $ | 123 | $ | 563 | ||||||||
| Schedule C | |||||||||||||||
| NCR CORPORATION | |||||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (in millions, except per share amounts) | |||||||||||||||
|
September 30, |
June 30, 2016 |
December 31, |
|||||||||||||
| Assets | |||||||||||||||
| Current assets | |||||||||||||||
| Cash and cash equivalents | $ | 318 | $ | 332 | $ | 328 | |||||||||
| Accounts receivable, net | 1,387 | 1,362 | 1,251 | ||||||||||||
| Inventories | 776 | 765 | 643 | ||||||||||||
| Other current assets | 270 | 294 | 327 | ||||||||||||
| Total current assets | 2,751 | 2,753 | 2,549 | ||||||||||||
| Property, plant and equipment, net | 289 | 290 | 322 | ||||||||||||
| Goodwill | 2,737 | 2,736 | 2,733 | ||||||||||||
| Intangibles, net | 704 | 734 | 798 | ||||||||||||
| Prepaid pension cost | 132 | 130 | 130 | ||||||||||||
| Deferred income taxes | 546 | 564 | 582 | ||||||||||||
| Other assets | 552 | 544 | 521 | ||||||||||||
| Total assets | $ | 7,711 | $ | 7,751 | $ | 7,635 | |||||||||
| Liabilities and stockholders’ equity | |||||||||||||||
| Current liabilities | |||||||||||||||
| Short-term borrowings | $ | 256 | $ | 259 | $ | 13 | |||||||||
| Accounts payable | 718 | 676 | 657 | ||||||||||||
| Payroll and benefits liabilities | 212 | 191 | 189 | ||||||||||||
| Deferred service revenue and customer deposits | 471 | 535 | 476 | ||||||||||||
| Other current liabilities | 345 | 356 | 446 | ||||||||||||
| Total current liabilities | 2,002 | 2,017 | 1,781 | ||||||||||||
| Long-term debt | 3,033 | 3,198 | 3,239 | ||||||||||||
| Pension and indemnity plan liabilities | 709 | 702 | 696 | ||||||||||||
| Postretirement and postemployment benefits liabilities | 127 | 128 | 133 | ||||||||||||
| Income tax accruals | 169 | 174 | 167 | ||||||||||||
| Other liabilities | 151 | 141 | 79 | ||||||||||||
| Total liabilities | 6,191 | 6,360 | 6,095 | ||||||||||||
| Redeemable noncontrolling interests | 10 | 9 | 16 | ||||||||||||
| Series A convertible preferred stock: par value $0.01 per share, 3.0 shares authorized, 0.9 shares issued and outstanding as of September 30, 2016 and 0.8 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 835 | 822 | 798 | ||||||||||||
| Stockholders' equity | |||||||||||||||
| NCR stockholders' equity: | |||||||||||||||
| Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding as of September 30, 2016, June 30, 2016 and December 31, 2015, respectively | — | — | — | ||||||||||||
| Common stock: par value $0.01 per share, 500.0 shares authorized, 124.0, 123.8 and 133.0 shares issued and outstanding as of September 30, 2016, June 30, 2016 and December 31, 2015, respectively | 1 | 1 | 1 | ||||||||||||
| Paid-in capital | 21 | — | — | ||||||||||||
| Retained earnings | 822 | 730 | 869 | ||||||||||||
| Accumulated other comprehensive loss | (172 | ) | (176 | ) | (150 | ) | |||||||||
| Total NCR stockholders' equity | 672 | 555 | 720 | ||||||||||||
| Noncontrolling interests in subsidiaries | 3 | 5 | 6 | ||||||||||||
| Total stockholders' equity | 675 | 560 | 726 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 7,711 | $ | 7,751 | $ | 7,635 | |||||||||
| Schedule D | ||||||||||||||||||||
| NCR CORPORATION | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| For the Periods Ended September 30 | ||||||||||||||||||||
| Three Months | Nine Months | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Operating activities | ||||||||||||||||||||
| Net income (loss) | 107 | $ | 99 | $ | 213 | $ | (202 | ) | ||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||
| Loss from discontinued operations | 2 | 4 | 2 | 4 | ||||||||||||||||
| Depreciation and amortization | 84 | 77 | 259 | 229 | ||||||||||||||||
| Stock-based compensation expense | 16 | 12 | 45 | 32 | ||||||||||||||||
| Deferred income taxes | 19 | 11 | 39 | 26 | ||||||||||||||||
| Gain on sale of property, plant and equipment and other assets | — | — | — | (1 | ) | |||||||||||||||
| Loss on divestiture | — | — | 1 | — | ||||||||||||||||
| Impairment of long-lived and other assets | — | — | 2 | 16 | ||||||||||||||||
| Changes in assets and liabilities: | ||||||||||||||||||||
| Receivables | (17 | ) | (29 | ) | (138 | ) | (80 | ) | ||||||||||||
| Inventories | (5 | ) | (32 | ) | (128 | ) | (86 | ) | ||||||||||||
| Current payables and accrued expenses | 64 | 42 | 68 | 17 | ||||||||||||||||
| Deferred service revenue and customer deposits | (53 | ) | (17 | ) | 78 | 72 | ||||||||||||||
| Employee benefit plans | (12 | ) | (19 | ) | (38 | ) | 367 | |||||||||||||
| Other assets and liabilities | 20 | 22 | (34 | ) | 22 | |||||||||||||||
| Net cash provided by operating activities | 225 | 170 | 369 | 416 | ||||||||||||||||
| Investing activities | ||||||||||||||||||||
| Expenditures for property, plant and equipment | (21 | ) | (16 | ) | (45 | ) | (47 | ) | ||||||||||||
| Additions to capitalized software | (41 | ) | (38 | ) | (115 | ) | (117 | ) | ||||||||||||
| Proceeds from divestiture | — | — | 47 | — | ||||||||||||||||
| Other investing activities, net | — | 3 | (8 | ) | — | |||||||||||||||
| Net cash used in investing activities | (62 | ) | (51 | ) | (121 | ) | (164 | ) | ||||||||||||
| Financing activities | ||||||||||||||||||||
| Short term borrowings, net | (3 | ) | (28 | ) | (2 | ) | — | |||||||||||||
| Payments on term credit facilities | (11 | ) | (196 | ) | (84 | ) | (312 | ) | ||||||||||||
| Payments on revolving credit facilities | (305 | ) | (369 | ) | (736 | ) | (977 | ) | ||||||||||||
| Borrowings on revolving credit facilities | 150 | 369 | 856 | 881 | ||||||||||||||||
| Debt issuance costs | — | — | (8 | ) | — | |||||||||||||||
| Repurchases of Company common stock | — | — | (250 | ) | — | |||||||||||||||
| Proceeds from employee stock plans | 4 | 1 | 10 | 12 | ||||||||||||||||
| Tax withholding payments on behalf of employees | — | — | (7 | ) | (10 | ) | ||||||||||||||
| Other financing activities | (2 | ) | — | (2 | ) | — | ||||||||||||||
| Net cash used in financing activities | (167 | ) | (223 | ) | (223 | ) | (406 | ) | ||||||||||||
| Cash flows from discontinued operations | ||||||||||||||||||||
| Net cash used in discontinued operations | (10 | ) | (10 | ) | (30 | ) | (27 | ) | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | — | (8 | ) | (5 | ) | (27 | ) | |||||||||||||
| Decrease in cash and cash equivalents | (14 | ) | (122 | ) | (10 | ) | (208 | ) | ||||||||||||
| Cash and cash equivalents at beginning of period | 332 | 425 | 328 | 511 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 318 | $ | 303 | $ | 318 | $ | 303 | ||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161025006669/en/
Source:
News Media Contact
NCR Corporation
Scott Sykes,
212-589-8428
scott.sykes@ncr.com
or
Investor
Contact
NCR Corporation
Michael Nelson, 678-808-6995
michael.nelson@ncr.com